AGM Update

RNS Number : 1394J

Gfinity PLC

18 December 2020

 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

18 December 2020

Gfinity plc

("Gfinity" or the "Company")

AGM Update

Gfinity (AIM: GFIN), a world-leading esports and gaming solutions provider, today provides an update on trading ahead of its Annual General Meeting (AGM) at 10.00 a.m at the Gfinity Arena, Vue Cinema Fulham Broadway Retail Centre, Fulham Road, London SW6 1BW. 

At the AGM, Neville Upton, Chairman, will provide the following update:

"I am pleased that the positive momentum we saw at the start of the current financial year has continued. The Company was operationally profitable in October and November and is on track for another strong performance in December 2020. The fact we have achieved month-on-month operating profitability for the first time since our AIM listing in December 2014 is an impressive milestone and a pleasing testament to the hard work of the team.  Given the project-based nature of some of our revenue streams and some seasonality in our business, it does not yet imply we will be always profitable on a monthly basis going forward, but it reflects the excellent progress made over the past nine months.

I am very pleased with the way we have sharpened our operational focus. It has positioned us strongly and the full extent of the market opportunity for Gfinity is becoming apparent. This positive performance has also been achieved against a challenging economic backdrop and the need to adapt to new ways of working. I would like to thank our employees, business partners and clients for their continued hard work and support.

The Company has come a very long way over the last nine months under the leadership of CEO John Clarke. The business has been recalibrated on three core areas where the Company has competitive strength and momentum, being: products and services that we own (Gfinity Digital Media), co-own (partnerships), and building communities for others (tech IP and world class production). We have signed a multi-year deal with Formula 1, a five-year partnership with ADMM, seen strong growth in users in GDM and signed our first technology licensing contract. The business is now more efficient than ever following a rationalisation of our cost base, with further reductions expected to come in 2021. In November 2020, monthly operating costs were £385,000, a reduction of 47% since November 2019, with a further reduction expected on culmination of our office lease in March 2021.  This leaves us well capitalised to deliver on our business plan.

Whilst we remain mindful of the broader challenges in the operating environment, our recent performance is evidence that the strategy is starting to deliver and is driving positive momentum across the business."

John Clarke, CEO, will comment as follows:

"Since April, the team has worked incredibly hard to put in place the foundations and building blocks needed to drive profitability and I am delighted that we are now seeing positive momentum across the Company. We have an operational mantra that is easy to understand and that is delivering - focus on what we own, what we co-own and build communities for others utilising our tech IP and our world class production expertise.

"It was a major achievement for the business to deliver successive months of operational profit for the first time in its history in both October and November. It is a sign that the changes we have made are delivering and this gives us confidence for the future. We are alive to the risks and challenges facing our customers and markets, but we will stay focused on what we can control and will continue to deliver outstanding business results for our partners and clients. We will also maintain the resilience which has guided us through 2020 and I am confident that Gfinity is now well positioned for growth in 2021 and beyond."

Update on the Formal Sale Process

In October 2020, Gfinity launched a Formal Sales Process (FSP) to explore all strategic options to capitalise on the potential market opportunity and to deliver shareholder value.  This includes options for making acquisitions, forming partnerships, separating the activities of the Group of a potential sale of the Company. 

The FSP continues to progress as planned with the Company continuing to engage in conversations as the Board evaluates the best options to accelerate the growth of the business.

The Company will provide further updates as and when appropriate.

Update on strategic priorities  

Gfinity has continued to deliver against its three strategic pillars focused on products and services that it owns (Gfinity Digital Media), co-owns (partnerships), and building communities for others (tech IP and world class production).

What we own (Gfinity Digital Media - GDM)

Over the last 18 months, Gfinity has significantly grown and expanded its digital media group, GDM.  As previously announced, in November 2020, GDM delivered a record month with 14 million monthly users across all sites (12 million in October 2020) and revenues in the month exceeded £275,000 for the first time. 

In December 2020, Gfinity announced the acquisition of the trade and assets of Epicstream LLC.  Epicstream LLC is a leading online news community for fantasy and sci-fi movies, television, video games, collectible cards and comic books and it will sit within the Company's digital media proposition. Gfinity will continue to look to complement organic growth with acquisition opportunities that will enable it to further build its own communities and deliver its own content into these communities. GDM remains on target to deliver revenue of approximately £2 million in the current financial year.

What we co-own (partnerships)

Gfinity is focused on working with its partners to create new ideas that capture the imagination of young gamers.  This partnership model is evidenced in the five-year agreement with Abu Dhabi Motorsport Management (ADMM) announced in May 2020.  Together, Gfinity and ADMM designed and built the Global Racing Series, with the first product, the V10 R-League, launched in September 2020.  Season one featured eight of the world's leading virtual racing teams and was viewed by more than 40 million fans on ESPN, BT Sport and STARZ ARABIA.  Season two is scheduled to begin in Spring 2021.

Building communities for others (tech IP and world class production)

Gfinity continues to deliver esports solutions for some of the world's biggest brands and sports rights holders, using its company owned tech IP and world class production facilities.  In October 2020, the Company started the delivery of Season 4 of the Formula 1 Esports Series virtually, utilising its proprietary virtual production service.  This is part of the multi-year agreement signed with Formula 1 in May 2020.

In September 2020, Gfinity was appointed by Cadbury to deliver a new gaming tournament, the 'Cadbury Heroes Parents League' and in October 2020, the Company was appointed by Red Bull as the production partner for 'Red Bull Worlds Simplified', a new digital show focused on the League of Legend's World Championship Final. Gfinity is currently delivering a consumer engagement programme for Trebor called 'Give me strength', which is linked to the V10 R-League and most recently, announced it was reappointed as the tournament operator for the third season of the ePremier League.

Sale of holding in Esports Awards Ltd

Gfinity today also announces the sale of its holding in Esports Awards Ltd for £500,000.  The proceeds from the sale will be used to accelerate further growth across Gfinity's three strategic pillars.

Gfinity acquired a 33% stake in Esports Awards Ltd in 2017 for £138,000, with the remaining 67% of the entity owned by Premier Team Promotions Ltd.  The investment was held at a carrying value of £nil in the company's accounts. 

ENDS

Enquiries :

Gfinity plc John Clarke, CEO	www.gfinityplc.com Via Teneo
Investor relations	[e-mail]
Teneo  (Media)	Tel: [phone]
Camilla Cunningham	[e-mail]
finnCap Group - Financial Adviser Henrik Persson / Marc Milmo / Kate Bannatyne / Teddy Whiley - finnCap Corporate Finance Chris Malcolm / Steph Frayne - Cavendish Corporate Finance	Tel: + 44 (0)20 7220 0500
Canaccord Genuity Limited   (AIM Nominated Adviser & Broker)	Tel: [phone]
Bobbie Hilliam / Georgina McCooke

About Gfinity

Gfinity (AIM: GFIN) is a world leading esports business. Created by gamers for the world's 2.7 billion gamers, Gfinity has a unique understanding of this fast-growing global community.  It uses this expertise both to provide advisory services and to design, develop and deliver unparalleled experiences and winning strategies for game publishers, sports rights holders, commercial partners and media companies.

Gfinity connects its partners with the esports community in authentic and innovative ways. This consists of on‑ and off-line competitions and industry‑leading content production. Relationships include EA SPORTS, Activision Blizzard, F1 Esports Series and the Forza Racing Championship.

Gfinity connects directly with tens of millions of gamers each month through its digital media group, Gfinity Digital Media.  Gfinity Digital Media includes websites such as: Gfinityesports, RealSport101 and StealthOptional and their respective social channels.

All Gfinity services are underpinned by the Company's proprietary technology platform delivering a level playing field for all competitors and supporting scalable multi-format leagues, ladders and knockout competitions.

About Esports Awards Ltd

Founded in 2015 the Esports Awards is the most prestigious night in the esports calendar and the only global award show focused on recognising excellence in esports.

The Esports Awards is dedicated to showcasing world-class performance and innovation from every corner of the industry throughout the year and reaches its pinnacle at its ceremony in November in Arlington, Texas, considered the Oscars of esports.

The ceremony celebrates everyone from the players, teams, media, hardware providers, games, events, and personalities that shape the esports industry. The 2019 Esports Awards saw a record-breaking 7 million viewers and 3.6 million votes counted, the results of 2020 are still being finalised but initial forecast is promising.

Other matters    

Rule 26.1

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on the investor section of the Company's website at www.Gfinityplc .com The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

END

 

 

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